Pharmas seek tax exemptions next fiscal year

The Bangladesh Association of Pharmaceutical Industries (Bapi) has urged the National Board of Revenue (NBR) to exempt tax deductions at source on various promotional and other expenses from fiscal year 2022-23 to encourage the export of medicine and increase the competitive capacity of the industry in the international market.

Ali Nawaz, chief financial officer (CFO) at Beximco Pharmaceuticals, presented the proposal on behalf of Bapi.

The association placed a few recommendations for the upcoming national budget of fiscal year 2022-23 during a meeting with National Board of Revenue Chairman Abu Hena Md Rahmatul Muneem at the latter's office in Dhaka yesterday.

Different types of expenses of the company arose for the creation of new markets, expansion of markets and legal and regulatory needs of the respective countries, said Nawaz.

He said physicians, individuals and organisations involved in the medical profession have to pay for organising various seminars and symposiums to introduce products.

In each country, doctors, hospitals and other related fields have to undertake sales development activities to introduce medicine. All these sales and marketing activities have to be paid for from related expenses, the association said.

The exemption is essentially necessary for the creation of new export markets and for the development of exports, they said. If tax at source is applied on such expenditures, it will increase the cost of export and greatly reduce Bangladesh's competitiveness, they added.

The association says that according to the demand of the drug administrations of different countries, registration of pharmaceutical products requires submitting various study reports such as bioequivalence study reports, clinical trial reports and other research information.

Bapi said in many cases all these reports have to be outsourced.

In addition, in some cases, special quality control tests are required on the raw materials of the products, most of which cannot be done locally. Companies have to pay companies abroad to get these activities done.

NBR Chairman Muneem said, "We have announced various facilities from the NBR to take the pharmaceutical industry forward."

"Today (yesterday) we will consider all the issues that you have proposed. We will accept what is logical. I will add those in the coming budget," he added.

Pharmaceutical shipments from Bangladesh grew 22.21 cent year-on-year in the first half of the current fiscal year on the back of continuous addition of anti-coronavirus drugs to the export basket, quality improvements and policy support.